Saturday, April 14, 2012

Western, Chinese and Vietnamese investors

Recently I saw a lot of Vietnamese flags at the cultural hall and was joking if this might be the coming handover ceremony since there are so many Vietnamese investments and people in town now. But this is misleading, since at least the amount of investment from China is nearly equal (as it is from Thailand, based on official numbers).
So what is the problem with these investments from China and Vietnam? Ok, just face it: Vientiane has currently 5,6 or 7 shopping mall projects in place, and entertainment parks etc. We talk about a 6 million population, with about 200.000 people in Vientiane who can afford to go to these malls. So there are three possibilities: It is plain money laundering, a scam or there is more background.
That leads back to the headline - the difference between (most) western investments and (most) Chinese and Vietnamese investments. China in particular isn't much interested in building a hotel in Vientiane or a bridge anywhere else. They are interested in ressources. So Country A needs a street, some medical equipment, a school etc. Country B wants ressources, something that Country A has. So Country B is offering Country A to build a school (construction workers and companies are from country B of course, so money stays in the country of origin), and in return it gets concessions.
Most western companies are looking for goods to trade or services to offer. We call it market. They want to build and run a hotel and make it a long term investment. They offer a fair market price for the land or a lease. They pay taxes with which a country then can build schools, bridges or buy medical equipment.